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Video Countdown



By Matt Kinsman
03/06/2007

Don't have video on your site? That's so 2005. Or at least, that's the popular thinking. SI.com re-launched last month with a video-heavy design (including a video box moved to the top of the page) and CarandDriver.com recently debuted a program that lets viewers take a virtual test drive.

However, turning video into a sustainable business model is proving to be a challenge. A recent Harris Interactive poll found that 73 percent of frequent YouTube users would visit the site less often if it started including short video ads before every clip. Even Google has stumbled by briefly featuring an Allstate ad in a Charlie Rose clip that blogger Scott Karp called "as interruptive, untargeted and utterly old school as anything mass TV advertising has ever inflicted on viewers."

Like many other online options, video is just one more dart being lobbed by publishers. Some are seeing early returns. "We've been able to get a higher CPM with video," says Jason Pontin, publisher of Technology Review. "Advertisers rightly or wrongly assume there's a higher intensity of interaction with the reader."

That blind faith won't last, however, and has already eroded in advanced markets such as technology. "Video for the sake of video will yield very modest increases in new visitors but most b-to-b video isn't very good," says Paul Calento, vice president of marketing at InfoWorld.

Publishers first need to decide whether ramping up for video makes long-term sense. "The majority of b-to-b sites have under 1 million page views per month," says Bill Reinstein, president and CEO of video vendor Accela Communications. "Let's say you have a site with a million pages per month and you use one of the commercially available tools that will help you get video onto half of your pages. Say you get a 5 percent click rate, now you're down to 25,000 plays of the video, which includes pre-roll. If you use a $200 CPM, you're making a whopping $5,000 a month. Five thousand a month is not a business, it won't come close to even covering the cost."


Content, Not Pixels

Straightforward, talking-head style presentations are not the future for video online. As with print (and increasingly live events), video is being customized for sponsors. TechTarget runs three-to-four minute advertorial videos for advertisers such as Cisco Systems and Hewlett Packard.

Video has potential as an edit tool but it's the content, not the medium that matters. InfoWorld has a video team on site at the Virtualization Executive Forum doing interviews that are shown on the InfoWorld Web site. A new product called Info Clips features animated video style presentations about key technology concepts that viewers couldn't get if they just read a text article. "The medium, whether it's video or whether it's podcasts, is not a differentiator in today's market," says Calento. "The program is."


Live Measurement

Video must also deliver results. "Engagement is more than watching a 15-second pre-roll," says Reinstein. "Now we can talk about what segments did they watch, did they click on certain links, did they answer certain questions. We try to get publishers to think about what types of engagement will be meaningful for their customers."

Online video is starting to resemble the choices and options of a DVD, rather than straight playback. "That kind of specific information we find a tremendous amount of customers responding to," says Reinstein. "In the Web space, you can measure a zillion things, but that isn't helpful. You have to winnow it down to the two or three most meaningful things to your client."

Without a running theme, video becomes a commodity-priced program. "We've been able to bundle podcasts so it's a seven-figure opportunity for us," says Calento. "Video right now hasn't been as easy to monetize. The last thing we want to do is move into content that's pricier and more time-consuming, yet we would make less money on it. As publishers, we need to break out of this and develop video programs with some kind of scale."

Calento says there is a four-step process to making multimedia work: 1) The Deliverable of what you want to sell;video, podcasts, mobile; 2) The Measurable, the ROI component; 3) The Nice To Have;things like co-marketing that add to the scale of program and sometimes validate the price point; 4) The Gotta Have;such as incorporating a piece of an advertiser's existing buy into the multimedia program. "If you do that, you're not selling $5,000 programs, you're selling $50,000 programs," Calento says.


Video Pricing

Pricing varies widely on the Web. Accela Communications president and CEO Bill Reinstein offers a peek at how his shop breaks down the cost. "Production fees are all over the map," he says. "We do some for clients like IBM that are into six figures. The lowest we do for production is about $10,000. If we do single camera work, it might be in the $6,000 range."


Production:
"The rate card goes two ways. It can be client supplied media, whether that's video or Flash graphics. If the customer supplies it, we don't charge them for it but they're still paying for it somewhere else."


Platform Integration and Delivery:
"If it's client supplied, the lowest we charge is about $5,000, then a CPM-based hosting and streaming charge. If you deliver 100,000 impressions, we have a fee of about $2 or $3 per thousand."

By Matt Kinsman
03/06/2007







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